TESTING THE VALIDITY OF PURCHASING POWER PARITY FOR BRICS COUNTRIES USING NON-LINEAR UNIT ROOT TEST

@inproceedings{Alper2015TESTINGTV,
  title={TESTING THE VALIDITY OF PURCHASING POWER PARITY FOR BRICS COUNTRIES USING NON-LINEAR UNIT ROOT TEST},
  author={Ali Eren Alper},
  year={2015}
}
The main aim of this paper  is to investigate the validity of the purchasing power parity (PPP) hypothesis for BRICS countries, by using both Kapetanios et al. (KSS) and rolling KSS unit root tests. By adopting the rolling unit root test, the study aims to determine episodic characteristics of the real exchange rates. The results of the KSS unit root test show that the PPP hypothesis is not valid for the entire countires. On the other hand, the study has found evidence of the validity of PPP… CONTINUE READING